Members of Congress from California wrote to the heads of the Justice Department, the Federal Reserve, and the Comptroller of the Currency on Tuesday, requesting that they investigate the foreclosure processes of banks under their purview for “possible violations of law or regulations.” In Texas, the Attorney General’s office sent “suspension notices” to 30 loan servicers in the state, asking them to halt foreclosures until they have completed a review of their procedures. The Attorney General in Massachusetts also urged financial institutions in the state to put a hold on all foreclosures. Sen. Robert Menendez, D-N.J., wrote Tuesday to the chief executives of Ally, JPMorgan, and Bank of America, along with officials at 117 mortgage servicing companies, requesting details on their internal investigations and what is being done to fix the problem. Menendez, along with Sen. Al Franken, D-Minn., has also asked the Government Accountability Office to open an investigation into whether “shortcomings” in federal oversight contributed to “false affidavits” in foreclosure proceedings.
In their letter to the regulatory agencies, California lawmakers, including House Speaker Nancy Pelosi, said lenders in the state have routinely resisted working with borrowers hurt by the weak economy. They argued that banks are slowing the economic recovery by worsening the foreclosure crisis. The recent revelations “only amplify our concerns that systemic problems exist in the ways many financial institutions have dealt with homeowners who are seeking to avoid foreclosures,” the letter said. “It is time that banks are held accountable for their practices that have left too many homeowners without real help.” Ok, so the banks screwed up, but Congress complaining about accountability really takes the cake for hypocrisy.
